Qgo Finance Ltd Management Discussions

> Qgo Finance Limited- An Overview

QGO Finance Limited (the Company), has emerged as a progressive and growth oriented Non-Banking Financial Company (NBFC) over the past five years. The Company is primarily engaged in financing construction projects, along with retail loans.

Key Strengths

• In-depth knowledge: With constant research and practical experience in the industry, we have gathered a comprehensive understanding of the construction projects market.

• Strong customer base: Our strength lies in our expanding satisfied customer base. It is a testimony to our continued commitment to enhance the infrastructural development in the rural & semi-urban areas & to help support Indias growth.

• Employee strength: We recruit candidates who are capable, and have deep local insight. We regularly train and motivate our employees to gather industry-relevant knowledge and strengthen their relationships with business partners and existing and potential customers.

• Faster disbursal: We have put in place an accelerated loan disbursement process, which is powered by technology. With minimal documentation and utmost flexibility, our loans are usually disbursed expeditiously.

> Forward - Looking Statements:

This Report contains "Forward - Looking Statements". Any statement that addresses expectations or predictions about the future, including but not limited to statements about the Companys strategy and growth, product development, market position, expenditures and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future growth. The Company cannot guarantee that these assumptions are accurate and will be realised. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on basis of any subsequent developments, information or events.

> Industry Structure and Development:

Non-Banking Financial Companies (NBFC) have rapidly emerged as an important segment of the Indian financial system. Moreover, NBFCs assume significance in the small business segment as they primarily cater to the credit requirements of the unorganised sector such as wholesale & retail traders, small-scale industries and small borrowers at the local level. NBFC is a heterogeneous group of financial institutions, performing a wide range of activities like hire- purchase finance, vehicle financing, equipment lease finance, personal loans, working capital loans, consumer loans, housing loans, loans against shares and investment, etc.

> Opportunities & Threats:

The Company is expecting good opportunities in the upcoming financial year. However, threats are perceived from its existing and prospective competitors in the same field also the changes in the external environmental may also present threats to the industry i.e. inflationary pressures, slowdown in policy making and reduction in household savings in financial products, Competition from local and multinational players, Execution risk, Regulatory changes, Attraction and retention of human capital are the major setbacks for NBFCs.

> Segment /Product wise performance:

The Company operates in single business segment i.e. NBFC, it has witnessed considerable growth in the last few years and is now being recognised as complementary to the banking sector due to implementation of innovative marketing strategies, introduction of tailor-made products, customer-oriented services, attractive rates of return on deposits and simplified procedures, etc.

> OUTLOOK:

The Company is mainly engaged in the business of financing and investment in "bodies corporate" in order to yield greater revenue for its stakeholders. The Company is planning to expand and diversify the operational activities in the coming years ahead in order to tap higher revenues.

> RISK AND CONCERNS:

Due to stiff competition in the finance field where the companys activities are centred in, the overall margins are always under pressure, but maintainable with the constant effort and good services rendered by the company.

> INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal control systems covering all its operations. Proper accounting records highlight the economy and efficiency of operations, safeguarding of assets against unauthorised use or losses, and the reliability of financial and operational information. Some of the significant features of internal control system are:

> Financial and Commercial functions have been structured to provide adequate support and control of the business.

> Risk Management policy has been adopted by the Company.

> The Company has an Internal Audit System conducted by the Internal Auditor of the Company. Standard operating procedures and guidelines are reviewed periodically to ensure adequate control

> OVERVIEW:

During the financial year under review the revenue from operations has increased from Rs. 8,17,89,202/- in the Financial year 2021-22 to Rs. 11,51,81,608/- in the Financial year 2022-23.

> ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS:

The Financial Statements have been prepared in accordance with the requirements of Indian Accounting Standards and the Accounting Standards as prescribed by the Institute of Chartered Accountants of India.

The Management believes that it has been objective and prudent in making estimates and judgments relating to the Financial Statements and confirms that these Financial Statements are a true and fair representation of the Companys Operations for the period under review.

> DEVELOPMENT ON HUMAN RESOURCE FRONT:

At QGO our human resources are critical to our success and carrying forward our mission. With their sustained, determined and able work efforts we were able to cruise smoothly through the hard time of the economic volatility and rapidly changing market conditions.

The requirement of the markets given the economic scenario has made this even more challenging. Attracting new talent with the drive, training and upgrading existing skill sets and getting all to move in a unified direction will definitely be a task in the company. Plans to execute the mandate on this count are already underway and we should see it impacting the results from the third quarter of the next financial year.

By creating a conducive environment for career growth, Company is trying to achieve the maximum utilisation of employees skills in the most possible way.

There is a need and the company is focused on retaining and bringing in talent keeping in mind the ambitious plans despite the market and industry scenario. The company also believes in recognizing and rewarding employees to boost their morale and enable them to achieve their maximum potential. The need to have a change in the management style of the company is one of the key focus areas this year.

> INDUSTRIAL RELATIONS:

Industrial Relations throughout the year continued to remain very cordial and satisfactory.

> Key financial ratios:

Sr. No Particulars of Ratio	31.03.2023 (In %)	31.03.2022 (In %)	Explanation for change in Ratios
1 Debtors Turnover	8.55%	15.33	-
2 Inventory Turnover	-	-	-
3 Interest Coverage Ratio	0.31	0.28	Due to Issue of NCD during the year
4 Current Ratio	95.33%	59.66	Increase in Loan & Advances
5 Debt Equity Ratio	9.69%	7.97	Due to Issue of NCD during the year
6 Operating Profit Margin (%)	20.53%	22.21	Due to Interest Expense
7 Net Profit Margin (%)	15.24%	11.13	Due to Interest Expense

> CAPITAL MANAGEMENT:

The Companys capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. As on 31st March, 2023, the Capital to Risk Assets Ratio ("CRAR") of your Company was 16.60% which is very high above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Sr no Particulars	Amount
1. Tier 1 Capital is Total Equity including reserves	13,10,27,872/-
2. Tier 2 Capital is NCD	0.00
Total Capital (A)	80,50,27,872/-
3. Weighted Risk Assets is Loans Given at 100 % weightage (B)	78,91,59,929/-
4. Capital Adequacy Ratio = (A)/(B)*100	16.60%

> Details pertaining to Net-worth of the Company:

Particulars	31.03.2023 (In Rs.)	31.03.2022 (In Rs.)	Explanation for change in Net-worth
Net-worth	13,10,27,872/-	11,58,79,800/-	Increase in Reserves

> DISCLOSURE OF ACCOUNTING TREATMENT:

The Company has followed the same Accounting Standard as prescribed in preparation of Financial Statements.

For and on behalf of Board of QGO Finance Limited

Sd/-

Rear Admiral Vineet Bakhshi (Retired)

Chairman and Director

DIN:02960365

Address: 137, Shakti Nagar, Dadabari,

Kota - 324009 Rajasthan, India

Date: May 29, 2023

Place: Mumbai